OK, those weren’t Obama’s exact words.
The President’s “Recovery Summer” Tour continues.
Now, he has replaced the silly “well, at least unemployment isn’t 12% or 14%” with “make no mistake about it, we’re headed in the right direction.”
Couple of points:
- Even I have figured out that the loose translation of “make no mistake about it” is “brace yourself, here comes a whopper”
- Almost 2/3s of Americans beg to differ … they think we’re headed in the wrong direction.
- The recent economic data isn’t even equivocal … any recovery that night have been taking place is stalled … with an increasing number of pundits looking for a double-dipper … why ?
Consider the WSJ comments of PIMCO CEO El-Erian:
High unemployment has historically induced companies and countries to become more inwardly oriented.
Many firms have already moved to a “self-insurance” mode, including holding large cash balances rather than investing in equipment and hiring people.
Internally, the economy is adapting to an environment of lower credit, general deleveraging, higher regulation and future tax increases.
Externally, it is adjusting to the impact of emerging economies like China, and the fact that certain European countries are facing increasingly unsustainable debts and deficits.
To remain successful, firms have no choice but to adapt.
Many have begun to adapt by resizing their cost structure, increasing cash balances, and altering how they use new earnings.
For companies, this is a prudent response to the uncertainty associated with national and global policy changes.
But to governments, firms come across as unresponsive to stimulus policies.
WSJ: The Real Tragedy of Persistent Unemployment, July 9, 2010
http://online.wsj.com/article/SB10001424052748704111704575354792743173672.html?mod=djemEditorialPage_h
Now, Team Obama says “What uncertainty ? President Obama is just misunderstood by business leaders”
And, the RST (Recovery Summer Tour) rolls on ….. promoting our pro-business president :
The big political news out of Washington yesterday is that the White House wants you to know that President Obama is not antibusiness.
White House aides say that they have launched “a coordinated campaign to push back against the perception” that its agenda is hostile to business.
“And it is more than just politics: Obama’s aides believe confidence in the general direction of White House policy has an effect on the willingness of corporations to hire, invest and push the economy toward a more solid recovery.”
You think?
We suppose it’s progress if Democrats are figuring out that business confidence is crucial to nurturing a fragile economic recovery into a durable expansion.
U.S. companies have an estimated $2 trillion in cash that they could deploy to create new jobs or buy equipment, but they aren’t about to do so until they know what their costs will be. There’s a “capital strike.”
The problem for Mr. Obama at this stage is that business will need more than words to conclude there’s been a real political change.
WSJ: Our pro-businesss president, July 9, 2010
http://online.wsj.com/article/SB10001424052748704111704575355413601768820.html?mod=WSJ_newsreel_opinion
The Homa Files 